6 Kiko Peleh. Kiko Peleh writes a put option on Japanese yen with a strike price of $0.008000=¥1.00 (V125.00 $1.00) at a premium of 0.0080 per yen and with an expiration date six months from now. The option is for ¥12,500,000. What is Kiko's profit or loss at maturity if the ending spot rates are ¥110, ¥115, 120, 125, 130, 135, and ¥140 per dollar?

International Financial Management
14th Edition
ISBN:9780357130698
Author:Madura
Publisher:Madura
Chapter5: Currency Derivatives
Section: Chapter Questions
Problem 5ST
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6
Kiko Peleh. Kiko Peleh writes a put option on
Japanese yen with a strike price of $0.008000=¥1.00
(¥125.00 = $1.00) at a premium of 0.0080¢ per yen
and with an expiration date six months from now.
The option is for ¥12,500,000. What is Kiko's profit
or loss at maturity if the ending spot rates are ¥110,
¥115, ¥120, V125, V130, V135, and ¥140 per dollar?
Transcribed Image Text:6 Kiko Peleh. Kiko Peleh writes a put option on Japanese yen with a strike price of $0.008000=¥1.00 (¥125.00 = $1.00) at a premium of 0.0080¢ per yen and with an expiration date six months from now. The option is for ¥12,500,000. What is Kiko's profit or loss at maturity if the ending spot rates are ¥110, ¥115, ¥120, V125, V130, V135, and ¥140 per dollar?
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